Guide to Filing Financial Statements for Business Owners in Singapore

Filing financial statements is a crucial annual requirement for businesses in Singapore. The Accounting and Corporate Regulatory Authority (ACRA) mandates this process to ensure transparency, accountability, and compliance with the Singapore Financial Reporting Standards (SFRS). In this comprehensive guide, we’ll walk you through the process, outline the components of financial statements, identify exemptions, and offer insights into the responsibilities of business owners.

What Do Company Financial Statements Comprise?

Before delving into the filing process, it’s essential to understand what constitutes financial statements. These statements provide a snapshot of a company’s financial health and include the following components:

1. Balance Sheet: Also known as the statement of financial position, it showcases a company’s equity, assets, and liabilities at a specific point in time.
2. Cash Flow Statement: This statement reveals the flow of cash in and out of the company due to its financing, operating, and investment activities.
3. Statement of Equity Changes: It outlines transactions between the company and its shareholders, changes in share capital, and any categories of shares issued during the year.
4. Comprehensive Income Statement: Financial statements should feature an income statement displaying income, losses, capital gains, and financing costs.
5. Notes: These provide explanations for critical aspects of the financial statements, such as accounting policies.
6. Comparative Information: To facilitate year-to-year comparisons, it’s essential to include data from the current and previous financial years.

What Types of Businesses Are Exempt from Filing Financial Statements?

Certain businesses may be fully or partially exempt from filing financial statements based on specific criteria. Small entities meeting at least two of the following criteria are only required to submit the first four types of statements mentioned earlier:

• Total assets of S$10 million or less.
• Total yearly income of S$10 million or less.
• A workforce of not more than 50 employees.

However, the following business entities do not need to file financial statements with ACRA but are required to prepare them internally for corporate secretaries to file Annual Returns (AR):

• Partnerships
• Sole proprietorships
• Exempt Private Companies (EPCs)
• Dormant unlisted companies

How Should Consolidated Financial Statements be Filed?

1. Use the BizFinx Preparation Tool to map relevant items in financial statements to ACRA’s taxonomy.
2. Ensure that statements fulfill the minimum requirement list, including a text block element covering the entire set of financial statements and detailed information elements for statutory reports, balance sheets, and income statements.
3. Validate and submit financial statements using the BizFinx Preparation Tool.
4. File the company’s annual returns within the stipulated deadline.

Who Is Responsible for Filing Financial Statements in Singapore?

ACRA does not dictate who should prepare or file financial statements. The company directors are responsible for ensuring the accuracy of these statements. Failure to present a true and fair view of the business may result in fines of up to S$50,000. Hence, it’s crucial to have qualified and experienced individuals handle this task.

What Needs to Be Done After Filing Financial Statements?

Once you’ve filed your financial statements with ACRA, it’s important to:

• File annual returns, which should be done after filing financial statements.
• Include financial statements in the supporting documents when filing corporate tax returns with the Inland Revenue Authority of Singapore (IRAS).

Summary

Filing financial statements is a vital aspect of running a business in Singapore. Understanding the process, components, exemptions, and responsibilities involved is crucial for business owners. By adhering to these guidelines, you can ensure compliance, transparency, and the smooth operation of your business in Singapore.